Wakilii

Alinda John v Premier Credit Uganda Limited and Another (Civil Suit No. 716 of 2019)

High Court · [2025] UGCOMMC 462 · 2025 Judgment for Counter Claimant AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Judgment on counterclaim following dismissal of plaintiff's suit and exparte hearing on counterclaim
Decision
Judgment entered for the counter claimant against all counter defendants jointly and severally for outstanding loan balance, general damages, interest and costs

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The High Court Commercial Division held that the plaintiff/counter defendant breached a loan agreement by defaulting on repayment obligations after paying only four instalments. The guarantors were held jointly liable under Contracts Act s.70, as the guarantee agreements created immediate liability upon default without requiring prior exhaustion of remedies against the principal debtor. The court awarded the outstanding principal balance of UGX 3,959,470 after offsetting proceeds from sale of security, general damages of UGX 3,000,000, and interest at 10% per annum from judgment.

Outcome

Judgment entered for the counter claimant against all counter defendants jointly and severally for outstanding loan balance, general damages, interest and costs

Facts

Premier Credit Uganda Limited advanced a loan of UGX 12,000,000 to Alinda John, secured by motor vehicle registration number UAZ630L and guaranteed by Rukuba Brendah and Karabahenda Sarah Alinda. The borrower paid only four instalments totalling UGX 5,515,905 before defaulting. After issuing a notice of default on 1 April 2019, the lender valued the security vehicle at UGX 7,000,000 (current market value) and UGX 3,500,000 (forced sale value) on 8 August 2019. The vehicle was sold on 16 March 2020 for UGX 8,500,000. The loan statement dated 27 August 2019 showed total debt of UGX 12,459,470. After offsetting the sale proceeds, a balance of UGX 3,959,470 remained outstanding. The plaintiff's suit was dismissed and the counterclaim proceeded exparte as neither the counter defendants nor their counsel attended court.

Issues

  1. Whether there was breach of contract by the plaintiff/1st counter defendant.
  2. Whether the 2nd and 3rd counter defendants are liable for the plaintiff/1st counter defendant's breach.
  3. Whether the 1st defendant/counter claimant is entitled to the remedies sought.

Orders

  • The counter defendants shall refund the 1st defendant/counter claimant UGX 3,959,470 (Uganda shillings Three million nine hundred fifty nine thousand four hundred seventy) due and owing.
  • The counter defendants shall pay the 1st defendant/counter claimant UGX 3,000,000 (Uganda shillings Three million) as general damages.
  • Interest of 10% per annum is imposed on the principal sum from the date of judgement till payment in full.
  • The 1st defendant/counter claimant is awarded costs of the counter claim.

Rules and key headnotes

Contract Law — Breach of Contract — Loan Agreements — Default on Repayment Obligations
A borrower who fails to perform monthly loan repayment obligations as agreed commits a breach of contract, entitling the lender to enforce the agreement and recover the outstanding debt.
Contract Law — Guarantees — Liability of Guarantors — Immediate Liability Upon Default
Under Contracts Act s.70, a guarantor's liability extends to the full extent of the principal debtor's liability and takes effect immediately upon default by the principal debtor, unless the guarantee agreement expressly stipulates that the creditor must first exhaust all remedies against the principal debtor (beneficium excussionis).
Contract Law — Guarantees — Joint and Several Liability — Independent Obligation
Where a guarantee agreement does not contain a beneficium excussionis clause requiring prior exhaustion of remedies against the principal debtor, the guarantee creates an independent and immediate liability upon default, making the guarantors jointly and severally liable with the principal debtor.
Contract Law — Damages — General Damages for Breach — Delayed Repayment of Money
In cases of delayed repayment of money, general damages are not awarded as additional compensation beyond the principal sum; instead, compensation is provided in the form of interest calculated based on prevailing interest rates and inflation during the period of delay, to reflect the real value of money lost due to the delay.
Contract Law — Damages — Exemplary Damages — Conditions for Award
Exemplary or punitive damages are awarded only in exceptional cases to punish reprehensible, malicious, or oppressive conduct by the defendant, and cannot be recovered unless the plaintiff is a victim of punishable behaviour; mere breach of contract without aggravating circumstances does not warrant such an award.
Civil Procedure — Exparte Proceedings — Burden of Proof — Counterclaims
Where a counterclaim proceeds exparte due to non-appearance of counter defendants, the legal and evidential burden remains on the counter claimant to establish each fact asserted on the balance of probabilities; remedies cannot be granted merely as prayed unless sufficiently supported by credible evidence.
Banking & Finance — Secured Lending — Sale of Security — Application of Proceeds
Where a lender exercises its right to sell security following borrower default, the proceeds of sale must be applied to offset the outstanding debt, and the borrower and guarantors remain liable for any balance remaining after such application.

Legislation cited (13)

Cases cited (29)

  • Abendeyo Absolom v Amos Kaheru [1995] 111 KALR
  • Sebuliba Busuulwa v Co-operative Bank Ltd [1982] HCB 129
  • Isaac Aluoch Polo Aluochier v The Senate & 2 Ors (Petition No. E014 of 2025)
  • Raila Odinga & another v Independent Electoral and Boundaries Commission & 2 others (Presidential Election Petition 1 of 2017) [2017] KESC 42
  • Kirugi and another v Kabiya & Others (1987) KLR 347
  • Ronald Kasibante v Shell (U) Ltd (High Court Civil Suit No. 542 of 2006)
  • Printing and Numerical Registering Co. v Simpson (1875) LR 19 Eq 462
  • Behange v School Outfitters (U) Ltd (2000) 1 EA 10
  • Sheikh Abdulai Rajab & 3 Others v Sheikh Abubakar Songa Wailojo & 2 Others (High Court Civil Suit No. 0028 of 2013)
  • Shaneebal Limited v County Government of Machakos (High Court Civil Suit No. 25 of 2016)
  • Logistics Link Limited v Yalelo (U) Limited [2023] KEHC 27381
  • Eco Bank (U) Ltd v Emco Works Limited & 2 others (High Court Civil Suit No. 860 of 2018)
  • James Fredrick Nsubuga v Attorney General (High Court Civil Suit No. 13 of 1993)
  • Erukana Kuwe v Isaac Patrick Matovu and another (High Court Civil Suit No. 177 of 2003)
  • Wainwright v Fontenot, 774 So. 2d 70 (2000)
  • Kabandize John Baptist and 21 Others v Kampala Capital City Authority (Court of Appeal Civil Appeal No. 36 of 2016)
  • Takiya Kashwahiri and Another v Kajungu Denis (Court of Appeal Civil Appeal No. 85 of 2011)
  • Uganda Commercial Bank v Deo Kigozi (1 EA 305)
  • Hadley v Baxendale (1854) 9 Exch 341
  • Charles Acire v M. Engola (High Court Civil Suit No. 143 of 1993)
  • Kibimba Rice Ltd v Umar Salim (Supreme Court Civil Appeal No. 17 of 1992)
  • Kenford Co. v County of Erie, 73 NY 2d 312
  • Nilecom Limited v Kodjo Enterprises (Civil Suit No. 0018 of 2014)
  • Sowah v Bank for Housing & Construction [1982-83] 2 GLR 1324
  • DFCU Bank Limited v Donna Kamuli (Civil Appeal No. 121 of 2016)
  • Gertz v Robert Welch, Inc. 418 U.S. 323 (1974)
  • Wangala Philip v Steel and Tube Industries Limited (Civil Suit No. 212 of 2018)
  • Milly Masembe v Sugar Corporation (U) Ltd and Another (Supreme Court Civil Appeal No. 1 of 2000)
  • Mohanlal Kakubhai Radia v Warid Telecom Uganda Ltd (High Court Civil Suit No. 224 of 2011)

Full judgment

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The original judgment as reported. Read the original PDF before relying on any passage.

Alinda John v Premier Credit Uganda Limited and Another (Civil Suit No. 716 of 2019) [2025] UGCommC 462 (13 December 2025)
Source: this page presents Wakilii’s issue analysis and metadata for a publicly reported Ugandan judgment. Any AI-generated summary is marked as such. Judgment text is sourced from the Uganda Legal Information Institute (ulii.org). Wakilii is not affiliated with ULII.